Industrial Devolution

From Mushrooms To Maneuvers, Factories Get New Life

February 11, 1996|By Fred R. Bleakley, The Wall Street Journal.

Many abandoned factories are humming again, not with the sounds of heavy machinery but with a whir of modern-day uses.

In St. Paul, Minn., residents are clambering on the walls of Vertical Endeavors, a rock-climbing gym that formerly was a Whirlpool washer and dryer factory. In Costa Mesa, Calif., Generation X shoppers flock to the LAB "antimall," once an electronics factory.

In city after city, in fact, developers are turning the mighty remnants of America's industrial age into museums, gyms, artists' studios, microbrewery/pubs, spaghetti restaurants and the like. Empty factories are springing to life because the sites are usually close to population centers where there's a lack of undeveloped land.

"When we searched for large spaces in Cincinnati, finding available land would have pushed us too far out," says Robert Wilson, chief financial officer of Roberd's, a Dayton retailer. Roberd's is turning 250,000 square feet of a former Kroger Co. candy factory into one of the largest furniture/consumer-electronics stores in the country.

"Reuse of old factories is replacing department stores as the magnets to draw people into downtowns," says Dolores Palma of HyattPalma Inc., an Alexandria, Va., consulting firm.

The common thread behind the rising demand for old factory space is the U.S. economy's switch to a service base. This can be seen at the Colt Industrial Park in Hartford, Conn., originally Samuel Colt's firearms factory, which has gone through a sort of guns-to-butter transition in recent years; it now is redolent of the gourmet-bakery aroma wafting from Desserts by David Glass. Other tenants include artists' and artisans' studios, marketing firms and small manufacturing concerns.

In Baltimore, developer David Cordish of Cordish Co. is helping to develop the city's waterfront by converting a giant old power plant into a multiple-tenant entertainment center.

In Walden, N.Y., the Big Apple Circus has outgrown one old factory and is moving this summer to a vacant wire-company building, where there is more room to rehearse its acts.

"We've heard a lot of crazy ideas," says Larry Pregon of Quadrelle Realty Services of Larchmont, N.Y., which three years ago leased the St. Paul space to Vertical Endeavors.

Quadrelle manages 10 million square feet of abandoned factory and warehouse space and has seen former industrial floors taken over by bingo halls, animated dinosaur shows, flea markets and antique-car exhibits. The developer now is considering plans for indoor soccer fields in the cavernous spaces where Caterpillar Inc. used to make fork-lift trucks outside Cleveland.

Even more offbeat, an entertainment company in Indianapolis turned the basement of a Western Electric Co. telephone factory into an abandoned city for "Dark Army" maneuvers; there, helmeted customers wearing colored vests skulk after each other with rapid-fire paint-ball guns.

Or there is Delftree Corp. of West Adams, Mass., which is growing shiitake mushrooms in 100,000 square feet of a former cotton mill.

The biggest demand for factory space, according to national commercial real-estate firms such as CB Commercial Real Estate Group, Cushman & Wakefield and North American Realty Advisory Services, is for mixed, multiple-tenant use.

North American has helped dispose of complexes as large as Bethlehem Steel's 1,300-acre site, containing 8 million square feet of mills, in Buffalo, N.Y. (It marketed one section as a port for container ships.)

A number of initiatives by the Environmental Protection Agency and several state legislatures aimed at better defining liability and allowable usage for contaminated properties are also focusing attention on tens of thousands of sites deemed full of hazardous waste.

"It's starting to turn around now," says EPA administrator Carol Browner. Recently, an EPA $200,000 pilot grant spurred plans by a Buffalo developer to use a former LTV Steel Co. site for a 23-acre hydroponic tomato greenhouse.

"We are saying to potential owners there are ways to deal with contamination."

Indeed, Reynolds Metals Co. was so successful treating aluminum smelting byproducts from its vacant Gum Springs, Ark., plant that it now treats all the aluminum "potliner" waste generated in the U.S. by itself and competitors.

To make factory conversions work, developers agree they need both flair and a flexible game plan to survive.

While waiting for higher-paying tenants like a laser-beam research company and a classic-car dealer, Lyons and his partner relied on storage fees from a records-keeping company to defray costs.

Down the Hudson River from Irvington, development of the 37-acre, mostly rotting Anaconda Copper Co. plant at Hastings and a soon-to-be-vacant 100-acre General Motors Corp. plant site at North Tarrytown won't be known until environmental questions are answered.